Dataram Reports Fiscal 2011 Third Quarter Financial Results

Dataram Corporation (NASDAQ: DRAM) today reported its financial results for its fiscal third quarter and nine months ended January 31, 2011. Revenues for the third quarter and first nine months of fiscal 2011 were $11.9 million and $35.6 million, respectively, which compares to $12.3 million and $32.1 million for the comparable prior year periods. The Company incurred a pre-tax net loss for the third quarter of the current fiscal year of $0.8 million which compares to a pre-tax net loss of $1.3 million for the comparable prior year period. Nine month pre-tax net loss totaled $3.8 million versus $5.5 million for the comparable prior year period.

John H. Freeman, Dataram’s president and CEO commented, “The release schedule and development of our XcelaSAN® product line is on track. We have completed our coding and testing of High Availability functionality. Systems with High Availability functionality are shipping to customers this quarter.”

Walker Blount, a respected storage systems analyst at Web-Feet Research, a memory and storage research firm said, “The subtle beauty of the Dataram XcelaSAN Model 100 is mid-level enterprise users have the most cost-effective and true plug-and-play fast storage appliance (450,000 IOPS), resulting in ease of integration for existing enterprise architectures. It can be up and running in less than two hours in a Fibre Channel server system. Users are looking for solutions that are easy to implement and that provide real cost savings – XcelaSAN delivers on both.”

Mr. Freeman continued, “In the third quarter, our revenues and gross margin recovered from the decline we experienced in our second quarter and were in line with our expectations. Nonetheless, we are proceeding with our plan to improve profitability and minimize the impact of periodic downward market fluctuations. We will complete the consolidation of our manufacturing facilities by the end of the current fiscal year and have already reduced our S, G & A expenses in our memory solutions business. We project continued growth in our memory solutions business. Our actions should position this business unit to operate more profitably at current revenue levels.”

The Company’s net loss for the third quarter was $0.8 million, or $0.09 per share which compares to a net loss of $6.5 million, or $0.73 per share for the comparable prior year period. Nine month net loss totaled $3.8 million versus $9.1 million for the prior comparable period. In the third quarter of the current fiscal year the Company’s XcelaSAN development project met the accounting requirements of having established technological feasibility, and accordingly, the Company capitalized approximately $0.8 million of XcelaSAN development costs. The net loss for the prior year three and nine months comparable periods includes income tax expense of $5.3 million and $3.6 million , respectively, and is comprised of a valuation allowance the Company placed on its deferred income tax assets.

Mr. Freeman concluded, “We have taken the necessary actions to ensure that our memory solutions business is profitable and growing. Our outlook for XcelaSAN is strong, particularly as High Availability functionality is now a reality.”

ABOUT DATARAM CORPORATION

Founded in 1967, Dataram is a worldwide leader in the manufacture of high-quality computer memory, storage and software products. Our products and services deliver IT infrastructure optimization, dramatically increase application performance and deliver substantial cost savings. Dataram solutions are deployed in 70 Fortune 100 companies and in mission-critical government and defense applications around the world. For more information about Dataram, visit www.dataram.com.

The information provided in this press release may include forward-looking statements relating to future events, such as the development of new products, pricing and availability of raw materials or the future financial performance of the Company. Actual results may differ from such projections and are subject to certain risks including, without limitation, risks arising from: changes in the price of memory chips, changes in the demand for memory systems, increased competition in the memory systems industry, order cancellations, delays in developing and commercializing new products and other factors described in the Company's most recent Annual Report on Form 10-K, filed with the Securities and Exchange Commission, which can be reviewed at http://www.sec.gov .
 

DATARAM CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)
       

Third Quarter Ended

January 31,

Nine Months Ended

January 31,
  2011   2010 2011   2010
 
Revenues $ 11,873 $ 12,284 $ 35,566 $ 32,147
 
Costs and expenses:
Cost of sales 8,970 8,899 27,127 23,490
Engineering and development 237 220 723 732
Research and development 112 892 1,825 3,388
Selling, general and administrative 2,954 3,009 8,556 8,851
Stock-based compensation expense* 148 346 461 726
Intangible asset amortization*     107       164     322       492  
    12,528       13,530     39,014       37,679  
 
Loss from operations (655 ) (1,246 ) (3,448 ) (5,532 )
 
Other income (expense)     (179 )     (11 )   (339 )     11  
 
Loss before income taxes (834 ) (1,257 ) (3,787 ) (5,521 )
 
Income tax expense     5       5,281     5       3,611  
 
Net loss $   (839 ) $   (6,538 ) $ (3,792 ) $   (9,132 )
 
Net loss per share:
Basic $   (0.09 ) $   (0.73 ) $ (0.43 ) $   (1.03 )
Diluted $   (0.09 ) $   (0.73 ) $ (0.43 ) $   (1.03 )
 
Weighted average number of shares
outstanding:
Basic     8,928       8,869     8,920       8,882  
Diluted     8,928       8,869     8,920       8,882  
 

* Items are recorded as a component of operating costs and expenses in the Company’s financialstatements filed with the Securities and Exchange Commission on Form 10-Q.
 

DATARAM CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)
       
 
January 31, 2011 April 30, 2010
 
ASSETS
Current assets
Cash and cash equivalents $   466 $   2,507
Accounts receivable, net 3,573 5,344
Inventories 5,108 6,872
Other current assets     328           87
Total current assets 9,475 14,810
 
Property and equipment, net 787 1,117
 
Other assets 83 105
 
Intangible assets, net 1,313 867
 
Goodwill     1,186           754
 
Total assets $   12,844       $   17,653
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 2,199 $ 3,523
Accrued liabilities 704 1,738
Notes payable     1,867           1,000
Total current liabilities 4,770 6,261
 
 
Stockholders' equity     8,074           11,392
 
Total liabilities and stockholders' equity

$
 

12,844
     

$
 

17,653

Copyright Business Wire 2010

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